Experts say pay reform appears unlikely soon

Nov. 14, 2012 - 03:30PM
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Pay and Performance consultant Howard Risher discusses the General Schedule system during a Partnership for Public Policy forum Wednesday in Washington. (Thomas Brown/Staff)

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Despite statements from the Obama administration that it is looking at reforming the six-decade-old General Schedule pay system for federal employees, outside experts see little chance of big changes to the system soon.

Doris Hausser, a former senior policy adviser on pay at the Office of Personnel Management, said at the panel discussion she is not hopeful that a compromise can be reached between critics and supporters of the current system.

“I just don’t think it’s going to happen, and I think there is enough pressure to maintain the status quo that we are going to be stuck with it for a while longer,” Hausser said.

She said the current General Schedule system, in place since 1949, is a “house of cards” that fails at providing compensation tied to distinctions in occupation, levels of experience and performance.

“It’s nothing short of a miracle that OPM keeps this limping along,” Hausser said.

She said there may even be ambivalence toward pay reform within the Office of Management and Budget and federal agencies — especially as budgets tighten — because the GS system is far more effective at projecting and containing payroll costs than are more flexible, market-based pay systems.

Critics charge the GS system is antiquated, is overly rigid for many of today’s agencies, fails to reflect market pay levels and is incapable of encouraging and rewarding high performance. Supporters argue the system is perceived by many employees as more equitable and less prone to discrimination than alternative performance-based pay systems.

Republican and Democratic administrations have called for reforms to the GS system, but intense opposition to significant changes from federal unions and their allies in Congress has blunted reform efforts in the past.

A commission to study federal pay and benefits proposed by the administration in its 2013 budget may be the best way forward for federal pay reform, according to Howard Risher, who was the managing consultant for the studies that led to the 1990 Federal Employees Pay Comparability Act and spoke at a panel discussion Wednesday hosted by the Coalition for Effective Change.

Risher said a commission could give a diverse group of stakeholders a chance to agree on common goals and philosophies before moving on to specific reforms.

He said the pay system needs to be audited to determine how well the government spends an estimated $115 billion a year.

“To my knowledge it has not been audited in any meaningful way in 20 years or so,” Risher said.

Jacque Simon, the public policy director at the American Federation of Government Employees, said at the panel discussion that the system helps eliminate the kind of race and gender discrimination that exists in the private sector and has adequate controls in place to encourage good workers and punish poor performers. Any shortcomings in the GS system’s ability to reward merit rest with managers who fail to make pay and promotion decisions based on performance, she argued.

Simon said many federal employees are wary of commissions in part because the high-profile Simpson-Bowles Commission recommended steps hurtful to employees, such as a three-year pay freeze, deep cuts in the federal workforce, a transition to a voucher-like health care benefit and increase pension contributions.

She said proposals to change the current pay system are largely about cutting the amount of money paid to many federal employees.

“When we get a situation where we have more funding, so that any kind of changes will leave at least some people better off without leaving any people worse off, then we would be very, very interested,” Simon said.